How to Build Wealth for Retirement [Creating a Custom Approach]

Written by mwealthgroup
Published on January 9, 2024

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A one-size-fits-all approach might work if you’re trying on a baseball cap…but it doesn’t work for your finances.

People have been led to believe that if they simply invest their money in the stock market, they’re able to have enough money for retirement. 

You’re unique, and so is your situation. So, don’t always take whatever advice you get about saving for retirement to heart. It may not apply to you or your circumstances.

The truth is, just like every individual is unique, each person's journey to retirement requires a unique approach, especially when considering investment and diversification strategies.

This blog is here to simplify the intricate world of building wealth for retirement. Think of it as your personal guide to understanding how you can make a retirement plan that's as unique as you are, designed specifically for wealth building. 

The top tips for retirement wealth building include:

Step 1: Start planning early - The sooner, the better!


Think of retirement planning like planting a small tree in your garden. Just as the best time to plant a tree was years ago (so you can enjoy the shade now), the best time to start planning for retirement is now. 

Why? The earlier you start, the more time you give your money to grow and become a big, strong "money tree" for your future.

Starting retirement savings early lets your money grow exponentially thanks to compound interest working its magic over decades. Developing this savings habit now means reaching a substantial nest egg down the road so your future self can relax instead of panicking over lost time.

Okay, so now we’ve established that starting NOW is best. Where do you go from here?

Step 2: Determine where you are on your wealth building journey


Imagine your journey to building wealth like different places on a road map. Everyone starts from a different spot, and the route you take depends on where you are right now. 

Evaluate your retirement situation based on the 6 building blocks. 

Our team at M Wealth Group educates clients about the six building blocks that make up your financial house and how each one can impact your retirement planning and wealth building. 

It’s important to understand where you are in each building block, what risks you may be facing and how to handle them to strengthen your financial house now and in the future. 

#1 Cashflow Management: Do you have a plan for when paychecks stop?

Cash flow management ensures reliable income even without work. Having a retirement cash flow plan is key, often with help from a financial planner.

#2 Debt Management: What’s your good vs. bad debt ratio?

It's important to differentiate 'good' debt that invests in assets from 'bad' debt like high-interest credit cards that hinder finances. Strategically use good debt while reducing bad debt.

#3 Reserves: Do you have Reserves in place?

Having reserve funds to cover unexpected expenses provides financial stability. The goal is 12-36 months of living expenses set aside.

#4 Proper Protection: Do you have life insurance?

Life insurance ensures financial security when the unexpected happens. It's a dual-purpose tool, providing a safety net while also serving as a wealth-building asset.

If you don’t currently have life insurance, NOW is the time to get it. Request a free quote from M Wealth Group to find the life insurance that fits your situation.

#5 Building Wealth: Are your retirement funds in the “growing” stage?

Building wealth for retirement isn't just about saving money; it involves a thoughtful approach to the right strategy for you. This process includes being aware of the impact of taxes, inflation, and market changes. 

If you’re at this stage, conduct a regular review of your current strategies to ensure they align with your retirement goals and risk tolerance.

#6 Building Legacy: Are you planning to transfer your wealth?

Planning for efficient wealth transfer involves setting up wills, trusts, and estate plans to safeguard financial legacy.

Click HERE  for free information on our estate plans to develop or update your wills, trusts, and estate plans, ensuring your assets are allocated according to your wishes and transferred to your chosen beneficiaries.

Step 3: Actively monitor & manage your finances


  • Monitor -

Your money needs organization and monitoring, and you need a way to see all your accounts in one place. No ifs, ans, or buts about it. Financial monitoring ensures your money is moving and managed efficiently. It’s not just tracking; it’s about organizing and cleaning up your finances. Think of this system as your personal financial assistant, helping you stay on top of things and making financial management less overwhelming.

There are many free and paid financial monitoring tools available to help you see the big picture of your finances.

Don’t Like Any Monitoring Options Out There?

Wealth Kickstart, offered by M Wealth Group, is a comprehensive and personalized financial service designed for high achievers and entrepreneurs. It combines one-on-one and group experiences with a cutting-edge Financial Monitoring app and a Wealth Education Platform. This service aims to empower users towards financial success through organization, education, and execution. Additionally, it includes bi-weekly interactive Q&A sessions with experts, providing ongoing support in the journey to financial freedom. 

  • Manage -

Actively manage your retirement accounts by regularly evaluating performance, ensuring risk alignments suit retirement goals, and rebalancing assets or consolidating accounts accordingly over time. Also, utilize tax-advantaged vehicles like HSAs and Roth IRAs to maximize retirement savings. You need regular reviews of your finances to impact how well you meet your goals and plan for the future.

Step 4: Personalize your investment decisions


Making wise investment choices is crucial for building wealth towards retirement. It's important to invest based on your personal interests, knowledge, and risk tolerance. 

There are countless options to consider, such as real estate, stocks, precious metals, and cryptocurrencies.

Understanding your risk tolerance can help guide smart investment allocations for your retirement goals. Those nearing retirement may want to allocate more towards fixed-income assets to preserve capital, while young investors can often take on more market risk for growth.

Step 5: Create multiple streams of passive income


It's tempting to want multiple income streams, but it's best to first focus on building one solid, high-producing income source. Get one revenue stream working like a well-oiled machine that keeps generating whether you're actively involved or not.

Some other examples of passive income streams are rental properties, annuities, peer-to-peer lending, real estate investment trusts (REITs), selling goods and services online, earning from a blog or YouTube channel, renting out a room or property on Airbnb, and creating and selling online courses. There are SO many options out there!

The key is not splitting focus too early. Pour your energy into optimizing one income stream first before expanding your money-making methods.

Step 6: Combat market fluctuations & life changes

Financial security requires planning for market turbulence, job changes, and other curveballs life throws. 

Diversify intelligently across assets with varying cycles to smooth volatility. 

  • Roll over employer accounts to self-directed IRAs when transitioning jobs. There are even strategies that can protect your account from market losses.
  • Maintain emergency reserves and diverse income streams so changes don't derail your plan. 
  •  Work with a financial advisor to be sure you have a strategy that gives you access to enough money for as long as you live. 
  •  Permanent life insurance policies build cash value savings, with protections from losses and tax-advantaged gains, that can be leveraged for other investments like real estate.

Step 7: Stay financially literate


financial literacy

Continuous financial education is key to staying atop evolving tax laws, discovering new investment opportunities, understanding market shifts to protect savings, and regularly tailoring your financial plan to match changing risk preferences and income needs throughout retirement. This way you can continue to learn how to build wealth in retirement.

Only 6-12 months away from retiring? Make sure you're on the right track and learn what to do in the 6 months before retiring.

Step 8: Work with the right financial expert


work with a financial advisor

In your journey towards retirement, teaming up with a financial expert is like having a trusted companion along for the ride. Just as you're a pro in your own field, a financial expert specializes in helping you navigate the complexities of retirement planning. They're skilled at creating customized plans and setting clear goals that match your unique dreams and financial situation.

By collaborating with a financial expert, you'll follow a clear and organized path in your financial planning, avoiding common pitfalls. They're there to answer your questions and provide support every step of the way. With their guidance, you can confidently work towards building wealth for a secure and enjoyable retirement.

Conclusion

Your building retirement journey is a personal one. It requires thoughtful customization that fits your financial goals and risk tolerance. The key is starting early, actively managing money, and adapting to life changes. This creates a plan that meets your needs with confidence.

While this guide provides a framework, a financial expert can help you navigate the complexities and nuances. Request a free retirement review HERE and take the first step toward a customized, secure retirement.

Book your complimentary financial review!

Ready to change your financial future? Schedule your free consultation with Martin and Chelsea Matthews, owners of M Wealth Group.
Click here →

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M Wealth Group
M Wealth Group
Together, Martin and Chelsea use their professional expertise and life experiences to provide personalized financial strategies to help clients achieve their goals.
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